My Car Can Drink!

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Today my car turned 21! I’ve had two cars in 34 years. I’m one of those people. Back in the 1900s, I replaced my 328,536 mile Honda Hooptie with a brand new 1999 Infiniti G20.

Keeping cars kept dollars in my wallet. I was driving my aging cars when most folks would have them in Fred Sanford’s salvage yard, or at least being overhauled by Chico in The Man’s garage.

Both new cars were financed for five years each. I paid a grand total of $42,000 for my “HondaFiniti”. Divide that by 34 years, and my average car payment is $103/month and declining.

What about repairs?
I don’t have my Honda info at my fingertips, but I can do much better with my Infiniti.  In January 2007, I bought Quicken software and started meticulous tracking of my spending.  I recommend that or the free program Mint.com.  It’s good to know where your money goes!

In the past five years, I averaged $607 a year on repairs that I probably would not have had, if I had been paying on a new car loan. $607 a year for repairs sure beats $5,000+ in car payments.  With only 208,279 miles, my 1999 Infiniti is just getting broken in.

Old Car Bonus
Besides not having car payments, another nice thing about keeping a car is that the insurance goes down as the car gets older. Once your car gets to be worth about $1,500 you might consider changing your coverage from “Comprehensive” to “Liability”. That way you are covered for the other car if you are at fault in an accident, but you pay out of pocket for your car. If your car is only worth $1,500 and you have a $500 or $1,000 deductible, if you get in an accident it’s probably time to put your vehicle out of its misery. At one point I was paying $2,095/year for insurance. Now it is half that: $1,047/year.

Lease or Buy?
There are owners and leasers. Clearly, I am the former. The lease mentality is understandable if you, like your car – are loaded. If I knew I did not have to make another buck for the rest of my life, I’d lease. That would be fun! Alas, I do not have Seinfeld money.

I also get it if you always need a nice new car for your business. If a realtor picked me up in a ’73 Pinto with a broken air conditioner to take me to see houses, I might inquire “What happened to the Bentley in your ad on the bus stop bench?”

If having a nice new car is one of your priorities and that is one way that you treat yourself, I get that as well.

When you lease, you are basically renting a car for a few years. At the end of your lease, you can buy the car for the amount you and the dealer agreed upon when you signed the lease. Or, you can walk away with nothing.

Not sure where you fit? Check out this Lease or Buy calculator.

Mistakes
I have seen too many people put themselves in a real financial bind by thinking a car is a ticking lemon that must be dumped before it gets old.

My suggestion to anyone watching their nickels:

  1. Your car is not a rolling dumpster for your trash. Keep your car’s interior clean. The nicer you keep it, the less likely you will feel compelled to scrap it and start anew. A little Armor All, upholstery or leather conditioner, and carpet shampoo-ing goes a long way. Last year, I splurged on a car detailing for only $120 at my local car wash.
  2. If you are in a financial pinch, and want/need out of an expensive lease, check out Swap-a-Lease.
  3. If you bought a car that you just can no longer afford, check out Edmunds and Kelley Blue Book to see what you can get for it. If you decide to sell, post on Auto Trader or Craigslist or eBay.
  4. If you want to find a great deal on a great used car, use the same sites in #3 to find out how much you should spend. You should also check out the car search engine AutoTempest.
  5. If you are embarrassed to be seen in public with your affordable transportation, park a block away and walk. Pretend you used the valet or Uber.

My two purchases have been brand new cars. When I need to pull the trigger on another car, I am going to look at a 2 or 3 year old model that is still under warranty. Hopefully, that won’t be anytime soon. Maybe it will be a car you leased.

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